International Conference on Eurasian Economies
29-31 August 2016 – Kaposvár, HUNGARY
Paper detail
Paper ID : 1680
Status : Paper published
Language : Turkish
Topic : Finance and Financial Crises
Presenter: Candan Yılmaz
Session : 1D Finans I
Austerity Policies in Debt Crisis: The Limits of Success
Borç Krizinde Kemer Sıkma Politikaları Ne Kadar Başarılı?
- Prof. Dr. Naci Tolga Saruç (İstanbul University, Türkiye)
- Candan Yılmaz (Gümüşhane University, Türkiye)
Abstract
Global financial crisis, emerged in 2008 and deepening thoroughly in 2008, revealed deep cracks in European Union countries –especially peripheral countries. The member of peripheral countries implemented European Union monetary policy have adopted low-cost borrowing as a public income. On the one hand, the global crisis has decreased the amount of funds in the international arena and led to an increase in borrowing costs. On the other hand, those peripheral countries with austerity policies imposed by the Troika faced with the problem of debt. The global crisis, appeared in the US and in a short time affected many countries gave rise to the debt crisis in the EU. The aim of this study is to demonstrate theoretically effects of the global crisis on peripheral countries of the EU. Furthermore, it is to analyze how the EU debt crisis considered the second phase of global crisis developed in member states and what kind of measures was taken for crisis. Eurostat database from 2006 to 2015 are used. EU members met the global financial crisis with high debt have increased in public expenditure in order to mitigate the effects of crisis. In addition to this, member states are deprived from tax income because of using strict austerity policies. In conclusion, it is shown that the austerity policies imposed by EU caused to increased further public debt stock in the member states and it left peripheral members the debt impasse.
JEL codes: F34, F36, G18
Saruç, Naci Tolga, Yılmaz, Candan (2016). "Austerity Policies in Debt Crisis: The Limits of Success" in Proceedings of International Conference of Eurasian Economies 2016, pp.539-548, Kaposvár, HUNGARY.
DOI: https://doi.org/10.36880/C07.01680